TaxTMI 
TaxTMI 
2023 (9) TMI 982
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....x of the submission of the Ld. Advocate appearing for the assessee is on two fold. According to her, though upon receipt of the notice u/s. 148 of the Act dated 01.10.2014 alleging escapement of assessment in regard to a sum of Rs. 48,47,73,370/- being the deduction towards the provision for customer disallowances and disallowance u/s. 35(2AB) to the extent of Rs. 1,02,76,500/-, the appellant duly made objections dated 28.10.2014 before the Ld.AO on merit on two counts as raised by him, the Ld.AO proceeded with the reassessment proceeding without first disposing of the said application preferred by the assessee dated 28.10.2014. As the Assessing Officer is bound to dispose of the said objection by passing a speaking order but proceeded to pass the order of assessment, the entire proceeding is not in terms of the statutory provisions and the impugned order is, therefore, bad in law and liable to be quashed. Secondly, it was argued by the Ld. Advocate appearing for the assessee that the issues as raised by the Ld.AO while reopening assessment u/s. 148 of the Act were already been dealt with during the original assessment proceeding. Upon examining the documents furnished by the asses....
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....g addition: a) Enhanced Depreciation of Rs. 7,59,02,526/- b) Disallowance of Rs. 6,00,425/- u/s. 14A r.w.Rule 8D of the Act 6. During the appellate proceedings, the disallowance of expenditure u/s. 14A stood upheld but the enhanced depreciation was allowed. Further that the TDS credit after due verification was also partly allowed whereupon the appeal before the Tribunal was filed by the appellant which was finalised upon allowing the whole TDS credit after due verification. 7. Thereafter on 01.10.2014 a notice u/s. 148 of the Act seeking to reopen the assessment was served upon the assessee. The assessee was also served with the copy of the reasons as asked for; On 28.10.2014, the assessee made his submissions explaining the issues before the Ld.AO with a prayer for dropping of the proceeding initiated u/s. 148 of the Act. We have gone through the objection dated 28.10.2014 preferred by the assessee to the DCIT, Bangalore, a copy whereof has been submitted before us which is also reproduced hereinbelow: 8. The case of the assessee is this that this particular submissions is nothing but objection of the proceeding initiated by the Ld.AO u/s. 148 of the Ac....
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....Officer subsequent to the original assessment proceeding is reflecting in recording reasons or in the notice u/s. 142(1) of the Act by the Ld.AO. Thus the facts which was available during the regular assessment and duly verified and examined by the Ld.AO, reopening on the same set of facts is nothing but a clear case of change of opinion as submitted by the Ld.AR appears to be acceptable. 12. In this regard, we have also dealt with the judgment passed by the Hon'ble Supreme Court in case of CIT vs. Kelvinator of India Ltd. (supra). While affirming the decision of the Full Bench of the Hon'ble Delhi High Court, the Hon'ble Apex Court was pleased to observe as follows: "Prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under two conditions, viz., if (a) the ITO had reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the ITO or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax had escaped assessment for that year, or (b) the ITO had in consequence of information in his possession reason....
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....ceeding and only upon due application of mind and upon examination of the same, the Ld.AO passes an order in the original assessment, the Assessing Officer cannot exercise the power to review or reassess the same. The same, in this case, is a change of opinion which cannot be appreciated, which is a product of uncanalised and unguided power exercised by the Assessing Officer in the garb of reassessment. We also find that the ratio laid down by the Hon'ble Apex Court in the present facts and circumstances of the case, to this effect that the reopening of the assessment on the basis of mere change of opinion cannot be per se reason to reopening, has been duly followed in all the other judgments relied upon by the Ld.AR. Thus on identical facts and circumstances of the matter, respectfully relying on the judgments cited by the Ld.AR, we find the reassessment proceeding initiated u/s. 148 of the Act merely on the basis of change of opinion, in the absence of any new evidence/material in the hands of the revenue on the same set of information which was available at the time of original assessment, is found to be void-ab-initio, bad in law and thus, the entire proceeding is quashed. I....
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....ovisions for doubtful debts, doubtful loans and advances, material in transit. obsolescence, provisions for performance guarantee etc.) was disallowed in the Revised Return filed by the Company as per Annexure-IV of the Computation of Income submitted vide our letter dated 28.06.2011 based on which regular Assessment was held. Since the amount of Rs. 43,33,71,424/- is being the difference of opening and closing balance of all the provisions made for the year, it includes provisions created for the year as well as provisions written off and written back. The net provisions disallowed as mentioned above, includes the net provisions on a/c of doubtful debts and customer disallowances of Rs.24,96,52,339/- (closing balance Rs.348,35,66,292/- less opening balance of Rs.323,39,13,953/-). This amount is the net off of the provisions made during the year for Rs.72, 76.50,096/- less provisions withdrawn/written off. Out of the provisions created for the year of Rs.72,76,50,096/-, on a/c of provisions for doubtful debts and customer disallowance, net provisions for customer disallowance is Rs.48,47,73,370/-.The detailed working was given at annexur....
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....tation of Total Income for the year. The business loss of Rs.2,67,60, 535/- from the Wind Mill business was adjusted from the business profit of Rs.1006,68,17,821/- from Manufacturing & Sales of Electronic Business. Accordingly total Business Income for the Company is Rs.1004,00,57,286/-on which the Company paid tax. Though the Company maintained separate Memoranda Accounts for Windmill Business no benefit u/s 80-IA was claimed by the Company for the year, since there was a business loss for the Wind Mill business. Thus no income was under Assessed. From the above clarifications, it is clear that there were neither double deduction nor any income escaped assessment. Hence the Company objects to the proposed reopening. In view of no omission or commission, the proceedings initiated under section 148 of the IT Act should be dropped. If any further clarification required, you may kindly feel free to let us know and we will be happy to clarify you. Thanking you, Encl: As above Yours faithfully, For M/s Bharat Electronics Ltd يه (Sanjoy Kumar Pal) Sr. Dy. General Manager (Fin & Tax) Document 2 Speed Post Gor(F): may wi....
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....f Income: ii. iii. iv. V. vi. vii. viii. ix. Annexure III: Details of the capital expenditure on which deduction under section 35(2AB) is claimed Annexure III: a. Copy of the certificate from DSIR b. Details of capital expenditure for which deduction is claimed under section 35(1)(iv) c. Confirmation that depreciation mentioned in this Annexure is not on the capital expenditure on which deduction is claimed under section 35 Annexure IV: Reconciliation of balance of provision for doubtful debts as on 31.03.2009 with the P&L. Account Annexure IX: Justification for claiming deduction towards amortization of leasehold land Annexure IX: Schedule V of Annual Accounts Annexure X: Confirmation that the expenditure on VRS was first disallowed in the respective assessments (Refer the Note in the Annexure that the amounts paid have been fully charged off in the respective years) Annexure XI: Reconciliation of the deduction under section 43B with the return of income (Schedule BP; Column 28) Justification for reducing provision for customer disallowance Details of the provisions for customer disallowance ....
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....ालय आउटर रिंग रोड, नागवारा, बेंगलà¥à¤°- 560045, à¤à¤¾à¤°à¤¤ Bharat Electronics Limited A Govt. of India Enterprise, Ministry of Defence) Registered Office: Outer Ring Road, Nagavara Bangalore-560 045. INDIA फोन/ Phane +91 (080) 25039300/25039284 फैकà¥à¤¸/Fax +91 (080) 25039233 :www.bel-india.com वेब / Web Kind Attention: Mr.Satish Kumar Singh N. Sub: Income Tax Assessment for the AV2009-10 Ref: Notice U/s 142 dt. 07.06.2011 ome Tax This has reference to your above referred Notice u/s 142 dt.07.06.2011 for the Assessment for AY 2009-10.Further to our submission vide our letter dt.20.06.2011 and personal hearing attended on 20.06.2011 in your office we are submitting following scrutiny clarification as desired by you as per Sr. No. of your queries. 3. Revised Return of Income: i) Schedule BP; Part A; Column 26: In Column 26 of Part A to Schedule BP of ITR 6 of the Revised Return for AY 2009-10. Rs 123,42,89,....
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....eceived from DSIR is enclosed at Annexure-'3' ii) Copy of 3CM ref no; TU/IV-15(14)/35(2AB)/3CM/2010 dt.26.08.2010 received from DSIR is enclosed at Annexure-'4' b. Detail of Capital Expenditure for which deduction is claimed u/s 35(1)(iv) No Capital expenditure has been claimed u/s 35(1)(iv). c. Confirmation that depreciation mentioned in this Annexure is not on the Capital Expenditure on which deduction is claimed under section 35: Depreciation of Rs. 15,59,67,000/- which is shown in Annexure III of the Computation of Income is on account of the Capital items used for R&D purpose has been excluded in the Computation of Net Revenue Expenditure claimed u/s 35(2AB). This is reflected in Para'4' to Schedule 21 of Annual Report. U/s 35(2AB) of the Income Tax Act 1961, net revenue expenditure other than depreciation of Rs.15,59,67,000/- has been claimed in the Return. iii) Annexure IV: Reconciliation of balance of provision for doubtful debts as on 31.03.2009 with the P&L Account: The reconciliation of Provision for Doubtful Debts as on 31.03.2009 is as follow: Particulars Amount in Rs Thousand Opening Balance as on 01.04.2008 (As Pe....